Atlanta mortgage and refinance lender

We hear about historically low interest rates on home loans practically every week. 30-year fixed loans are available with interest rates well below 5%, and they’re still going lower! 15 and 20-year loans offer even lower rates. Interest rates like these would have home buyers lining up to buy any available real estate in any other market. So who is getting these super low interest home loans? Very, very few people. What’s wrong?

The biggest problem is that a lot of homeowners are upside down on their mortgages. Property values have fallen significantly in the last few years. Many homeowners are finding that their homes are worth less now than when they bought them. Cash out refinances have exacerbated the problem, and sometimes even caused homeowners to owe more than the current value of their home.

Banks will only make loans of some percentage – 80% up to 97.5% – of a home’s current value. The thousands of people who owe more than their homes are worth can’t pay off their old loan with the proceeds from a new loan. That’s true for a refinance or for selling one house and buying another. Unless a homeowner can come up with the cash to make up the shortfall, they’re stuck, no matter how well qualified they are.

In this economy the unemployment rate is high, but as concerning is the length of time it has been so high. Many homeowners have been out of work for an extended period of time. Many more are underemployed – working part time jobs or jobs far below their qualifications and income. Somehow many of these people are making ends meet in spite of the challenges. They’ve cut back on spending, stay-at-home moms have gone back to work, and they’ve started their own businesses. But they can’t show sufficient income to prove to a lender that they can make a lower mortgage payment than the one they’re making now. Changes in employment make it difficult to qualify for a loan even if the income is sufficient. Two years of steady employment in the same field is considered standard by most lenders. Contract work is not considered stable until it has a two year history, even if the work is in the same field that the person was originally employed in.

The standards for qualifying for a loan have become more stringent. The huge number of defaults can be traced back to lending practices that were too lenient. So banks have tightened up their requirements. Requirements for debt ratios and credit scores are much stricter than they were even years ago. The chances that a homeowner has a lot of cash in the bank and nearly perfect credit, after surviving employment problems, falling home values and other challenges, is slim.

First time home buyer face the same employment and strict lending practices problems that existing homeowners do, but at least they’re not under water on mortgages. Unfortunately potential first time buyers with sufficient verifiable income, a hefty downpayment and great credit are in short supply. Fear of losing their jobs or of home prices falling further has detered many of those who actually are in a good position to buy a home. Buying your first home is a scary experience. The current economic conditions don’t make it easy to take that risk.

So those tantalizing interest rates that we keep hearing about in the news remain just out of reach. Something that’s technically true, but simultaneously too good to be true.

If you are one of those in a position to buy a new home in California, this is the time to do it. Once the market turns around, interest rates will rise quickly. Chula Vista new homes

We hear about historically low interest rates on home loans practically every week. 30-year fixed loans are available with interest rates well below 5%, and they’re still going lower! 15 and 20-year loans offer even lower rates. Interest rates like these would have home buyers lining up to buy any available real estate in any other market. So who is getting these super low interest home loans? Very, very few people. What’s wrong?

The biggest problem is that a lot of homeowners are upside down on their mortgages. Property values have fallen significantly in the last few years. Many homeowners are finding that their homes are worth less now than when they bought them. Cash out refinances have exacerbated the problem, and sometimes even caused homeowners to owe more than the current value of their home.

Banks will only make loans of some percentage – 80% up to 97.5% – of a home’s current value. The thousands of people who owe more than their homes are worth can’t pay off their old loan with the proceeds from a new loan. That’s true for a refinance or for selling one house and buying another. Unless a homeowner can come up with the cash to make up the shortfall, they’re stuck, no matter how well qualified they are.

In this economy the unemployment rate is high, but as concerning is the length of time it has been so high. Many homeowners have been out of work for an extended period of time. Many more are underemployed – working part time jobs or jobs far below their qualifications and income. Somehow many of these people are making ends meet in spite of the challenges. They’ve cut back on spending, stay-at-home moms have gone back to work, and they’ve started their own businesses. But they can’t show sufficient income to prove to a lender that they can make a lower mortgage payment than the one they’re making now. Changes in employment make it difficult to qualify for a loan even if the income is sufficient. Two years of steady employment in the same field is considered standard by most lenders. Contract work is not considered stable until it has a two year history, even if the work is in the same field that the person was originally employed in.

The standards for qualifying for a loan have become more stringent. The huge number of defaults can be traced back to lending practices that were too lenient. So banks have tightened up their requirements. Requirements for debt ratios and credit scores are much stricter than they were even years ago. The chances that a homeowner has a lot of cash in the bank and nearly perfect credit, after surviving employment problems, falling home values and other challenges, is slim.

First time home buyer face the same employment and strict lending practices problems that existing homeowners do, but at least they’re not under water on mortgages. Unfortunately potential first time buyers with sufficient verifiable income, a hefty downpayment and great credit are in short supply. Fear of losing their jobs or of home prices falling further has detered many of those who actually are in a good position to buy a home. Buying your first home is a scary experience. The current economic conditions don’t make it easy to take that risk.

So those tantalizing interest rates that we keep hearing about in the news remain just out of reach. Something that’s technically true, but simultaneously too good to be true.

If you are one of those in a position to buy a new home in California, this is the time to do it. Once the market turns around, interest rates will rise quickly. Chula Vista new homes